Roth, CESA, Traditional -- Telhio Individual Retirement Accounts will meet whatever need you have! Contact our Sales & Service Center with questions at 221-3233 (add 877 for toll-free).

Have the eligibility requirements for contributing to an IRA changed?
Click here for detailed information.

How much can be contributed to an IRA account beginning January 1, 2005?
Providing the qualification requirements are met, the maximum annual contribution to a Traditional and Roth IRA accounts is $4,000 per year individual plus catchup contributions for age 50 and older of $500, and the maximum contributions to a Savings account is $2,000 per year per child, up to age 18. Note: Contribution to a Coverdell Education does not reduce the amount that can be contributed to a Traditional or Roth IRA, and is not tax deductible.

Can my spouse and I each have an IRA account?
Any individual may qualify for his or her own IRA, even if they do not generate income. However, in the case of married couples, they must file a joint tax return in order to qualify for a Roth or Traditional IRA. In addition, unlike the previous IRA tax laws, if you or your spouse contribute to a 401(k) and/or company sponsored retirement program, your may now qualify for either a full or partial Traditional or Roth IRA account. The only thing that may adjust is the deduction capability for Traditional IRA accounts.

What are the income qualification restrictions for contributing to an IRA?
Qualifying for contributions to an IRA based on income has changed and varies by the type of IRA. See pages on Traditional, CESA, or Roth for more detailed information on each specific account type.

What are the age restrictions for contributing to an IRA?
For the Traditional IRA, the maximum age for contribution is 70 1/2, for the Roth IRA contributions may be made beyond age 70 1/2, so long as the individual still has earned income.

What is the deadline for contributing to an IRA?
For the Traditional and Roth IRAs and the CESAs, the contributions can be made up to the tax-filing deadline, generally April 15th. So even if your income is indefinite, you can still contribute up through tax deadline the following year. Telhio offers both free payroll deduction and direct deposit services to make contributing to your IRA on a regular basis easy and hassle-free.

Can I invest in both types of IRAs and a CESA?
Yes. However, the aggregate contribution to a Traditional and Roth IRA cannot exceed $4,000 per year. It is not necessary to contribute the same amount to each account each year, as long as the combined contribution does not exceed $4,000 in any given year plus catchup contributions for age 50 and older of $500. The $2000 maximum annual contribution per child per year for a CESA is separate and does not reduce the amount that can be contributed to a Traditional or Roth IRA.

How does the tax liability vary between each IRA product?
Money invested in a Traditional IRA is pre-tax money. This means paying taxes on money invested and interest earned is deferred until the money is withdrawn. Money invested in a Roth or CESA is post-tax money. This means taxes are paid on money invested at the time the money is deposited. However, one of the significant benefits of both the Roth and CESA is that interest earned is tax-free when the withdrawal qualifications are met.

Should I convert my existing (Traditional) IRA to a Roth IRA?
Maybe. If your modified adjusted gross income is $100,000 or less (in the year you switch) you qualify to transfer an existing (Traditional) IRA into a Roth IRA. However, married taxpayers filing separately cannot make such a transfer. Keep in mind taxes will have to be paid on the amount transferred from an existing (Traditional) IRA at the time the switch is made.

Therefore, if you should transfer or not depends on your specific situation. Generally speaking, two issues will guide this decision. First, the younger you are the more likely you will benefit by transferring. Second, if you anticipate your tax liability at the time you retire to be equal or higher than what it is now, it may make sense to transfer. The older you are and/or if it is anticipated your tax liability will be lower when you retire, it may be beneficial to maintain the existing (Traditional) IRA account.

Can I, or should I, invest in a Roth IRA if I currently contribute to a 401(k)?
If you have enough money to contribute to your 401(k) plan and a Roth IRA, you may invest in a Roth IRA if your income level allows you to do so. Generally speaking, you should contribute to your 401(k) at least up to the amount that your employer matches your contributions. Beyond that level, it may make sense to invest the maximum allowed in a Roth IRA.

How can money in an IRA be used to purchase a home?
Money can be withdrawn, penalty-free, from a Traditional or Roth IRA if it will be used for a first-time home purchase. However, the limit is a lifetime maximum of $10,000 per IRA account holder and other specific withdrawal guidelines must be met.

Contribution limits increase each year through 2008 and are subject to cost-of-living adjustments (COLA) each year thereafter. In addition to a contribution limit increase, those IRA owners who have attained age 50 may contribute an additional amount, allowing them to "catch up" on their retirement savings. Click here for a chart showing the contribution limits.